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1 Module 1 – Introduction to Consumer Behavior
PROGRAM OUTCOMES
By the time of graduation, the students of the program shall be able to:
1. Articulate and discuss the latest developments in the specific field of practice.
2. Effectively communicate orally and in writing using both English and Filipino
3. Work effectively and independently in multi-disciplinary and multi-cultural teams.
4. Act in recognition of professional, social, and ethical responsibility.
5. Preserve and promote "Filipino historical and cultural heritage".
6. Perform the basic functions of management such as planning, organizing, staffing, directing and
controlling.
7. Apply the basic concepts that underlie each of the functional areas of business (marketing, finance, human
resource management, production and operations management, information technology, and strategic
management) and employ these concepts in various business situations.
8. Select the proper decision making tools to critically, analytically and creatively solve problems and drive
results.
9. Express oneself clearly and communicate effectively with stakeholders both in oral and written forms.
10. Apply information and communication technology (ICT) skills as required by the business environment.
11. Work effectively with other stakeholders and manage conflict in the workplace.
12. Plan and implement business related activities.
13. Demonstrate corporate citizenship and social responsibility.
14. Exercise high personal moral and ethical standards.
15. Analyse the business environment for strategic direction.
16. Prepare operational plans.
17. Innovate business ideas based on emerging industry.
18. Manage a strategic business unit for economic sustainability.
19. Conduct business research.
20. To participate in various types of employment, development activities, and public discourse particularly in
response to the needs of the communities one serves.
COURSE TITLE
ELEC 3 – Consumer Behavior
COURSE DESCRIPTION
This course is a study of consumer as a tool for marketing decision. It describes the rational for studying,
the consumer behavior outcomes and the consumer behavior process the psychological core, the process of
making decisions, and the post-decisions evaluation. Consumer’s culture, consumer behavior and issues
concerning consumer welfare is also discussed.
COURSE OUTCOMES (CMO)
In this course, you should be able to:

1. identify the basic terms and concepts within the fields of human behavior studies (such as Psychology
and sociology) as well as the terms and concepts within the field of marketing that are significant in
understanding the field of Consumer Behavior;
2. understand the ideas and reasons that underlie these concepts;
3. understand the relationship of these concepts to each other and their relationship to Marketing and/or
business principles and practices;
4. demonstrate how to apply and use these concepts in Marketing and/or business situation; and
5. examine some of the internal factors that influence consumers’ decisions, a critical domain of consumer
behavior involves understanding how consumers make acquisition, consumption, and disposition
decision.
INTRODUCTION
This module will give us the thorough understanding of consumer behavior and the critical factors that
may affect a consumer’s behavior. This also presents the overall model that guides the organization of this
book. As this model indicates, consumer behavior covers four basic domains: (1) the psychological core, (2)
the process of making decisions, (3) the consumer’s culture, and (4) consumer behavior outcomes and issues.
In addition, you will read about the implications of consumer behavior for making activities.
Consumer behavior is greatly affected by the amount of effort that consumers put into their consumption
behaviors and decisions. Lesson 2 describes three critical factors that affect effort: the (1) motivation. (2) ability,
and (3) opportunity consumers have to engage in behaviors and make decisions.
This module is divided into two lessons, namely:

Lesson 1 Understanding Consumer Behavior
Lesson 2 Motivation, Ability, and Opportunity.
MODULE LEARNING OUTCOMES
In this module, you should be able to:

1. define consumer behavior and explain the components that make up the definition;
2. show how motivation influences high-effort behavior, high-effort information processing and decision-
making, and felt involvement; and
3. developing information about consumer behavior.
Lesson 1:
Understanding Consumer Behavior
SPECIFIC LEARNING OUTCOMES

In this lesson you should be able to:
1. identify the four domains of consumer behavior that affect acquisition, usage, and disposition
decisions;
2. discuss the benefits of studying consumer behavior;
3. explain how companies apply consumer behavior concepts when making marketing decisions; and
4. explain making promotion and marketing communications decisions
PRE-ASSESSMENT
MULTIPLE CHOICE
Direction: Read each item carefully. Choose the letter of the correct answer.
1. A common acquisition method used for many offerings.

a. trading
b. buying
c. renting or leasing
2. A product, service, activity, experience, or idea offered by a marketing organization to consumer.
a. consumer behavior
b. offering
c. buyers
3. Buying represents one type of __________ behavior.
a. acquisition
b. usage
c. disposition
4. The process by which a consumer comes to own an offering.
a. disposition
b. usage
c. acquisition
5. Using an old toothbrush to clean rust from tool or making shorts out of an old pair of jeans shows
consumers can continue using an item instead of disposing of it.
a. Find a new use for it.
b. Get rid of it temporarily.
c. Get rid of it permanently.
6. Consumers (and businesses) can exchange goods and services without having money change
hands.
a. Gifting
b. Bartering
c. Finding
7. The typical or expected behaviors’, norms, and ideas that characterize a group of people.
a. Culture
b. Attitude
c. Beliefs
8. A group of people consumers compare themselves with for information regarding behavior, attitudes,
or values.
a. Reference group
b. High-effort decision
c. Recognition
9. External signs that consumers use to express their identity.
a. Values
b. Personality
c. Symbols
10. The activity set of institutions and processes for creating, communicating, delivering, and exchanging
offerings that have value for customers, clients, partners, and society at large.
a. Advocacy
b. Ethics
c. Marketing-
LESSON MAP
Understanding
Consumer Behavior
Factors Affecting Beneficiaries of Making Business

Consumer
Consumer Consumer Decisions based
Behavior Defined
Behavior Behavior Study on Marketing
Figure 1 Describes the flow of Understanding Consumer Behavior
CORE CONTENTS
ENGAGE: CASE ANALYSIS
Factors Affecting Consumer Behavior

Martin Incorporation was a company carrying on business in cosmetics and perfumes. They were
not following the marketing concept and were catering to a target market which was using their products. In
other words, they only concentrate on what they would make, and did not bother about changes in
preferences of their target market.
They were later joined by Mr. Ash, a marketing graduate who advised the company regarding the
changing consumer preferences, and the changes that were necessary to be incorporated in the product.
He emphasized, and the income factors, and social factors only. He modernized the product to a great
extent, and invested about 30 lakhs on new packing, etc. Even after six months of these changes brought
about by him, the company did not seem to have proportionate increase in sales.
The assistant manager and the product manager were not very happy with the changes, and thought that
although an effort has been made in the right direction, some important factor concerning consumer behavior
had been neglected.
Activity 1: Base on the readings above, answers the following questions:

1. Do you agree with the assistant and product managers? Why or why not?
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2. What other factors, if any, could been considered? Elaborate in detail.

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EXPLORE: READING CONCEPTS

DEFINING CONSUMER BEHAVIOR
If you were asked to defined consumer behavior, you might say it refers to the study of how a person
buys products. However, consumer behavior really involves quite a bit more, as this more complete definition
indicates:
• Consumer behavior reflects the totality of consumers’ decisions with respect to the acquisition,
consumption, and disposition of goods, services, activities, experiences, people, and ideas by (human)
decision-making units (over time)
Consumer Behavior Involves Goods, Services, Activities, Experience, People, And Ideas
Consumer behavior means more than just the way that a person buys tangible products such
as bath soap and automobiles. It also includes consumer’s use of services activities, experience, and
ideas such as going to the dentist, attending a concert, taking a trip, and donating to UNICEF. In
addition, consumers make decisions about people, such as voting for politicians, reading books by
certain authors, streaming movies or TV shows starring certain actors, and attending concerts featuring
favorite bands.
Another example of consumer behavior involves choice about the consumption of time, scarce
resources. Will you check to see what’s happening on Facebook, search for a YouTube video, watch a
sports event live, or record a program and watch it later, for instance? How we use time reflects who
we are, what our lifestyle are like, and how we are both the same as and different from others. Because
consumer behavior includes the consumption of so many things, we use the simple term offering to
encompass these entities.
• Consumer behavior- The totality of consumers decisions with respect to the acquisition,
consumption, and disposition of goods, services, time and ideas by human decision-making
units (over time).
• Offering -A product, service, activity, experience, or idea offered by a marketing organization
to consumers.
Consumer Behavior Involves More Than Buying

Marketers are intensely interested in consumer behavior related to using and disposing of a
product, not just the way that consumers make acquisition decisions. They also study how consumer
makes acquisition about personal finances.
Acquiring an Offering
Buying represents one type of acquisition behavior. As shown later in this lesson, acquisition
includes other ways of obtaining goods and services, such as renting, leasing, trading, and sharing. It
also involves decisions about time as well as money. Consumers sometime find themselves interrupted
during a consumption experience; studies show interruption actually makes a pleasant experience
seem more enjoyable when resumed. Deadlines can also affect acquisition behavior. Consumers tend
to procrastinate in redeeming coupons and gift card with far-future deadlines, but move more quickly
when deadlines are closer. Why? Because they do not want to regret having missed out and they
expect to have more time to enjoy and indulge themselves with the acquisition in the future.
Using an Offering
After consumers acquire an offering, they use it, which is why usage is at the very core of
consumer behavior. Whether and why we use certain products can symbolize something about who
we are, what we value, and what we believe. The product we use on Thanksgiving may symbolize the
events significance and how we feel about our guest. The music we enjoy and the jewelry we wear
can also symbolize who we are and how we feel. Moreover, marketers must be sensitive to when
consumer are likely to use a product, whether they find it effective, whether they control their
consumption of it, and how they react after using it –do they spread positive or negative word-of-
mouth reviews about a new for instance?
Disposing of an Offering
Disposition, how consumers get rid of an offering they have previously acquired, can have
important implications for marketers. Consumers can give away their used possessions, sell them on
eBay or on consignment to vintage stores, rent them via sharing websites, or lend them to others. Eco-
minded consumers often seek out biodegradable products made from recycled materials or choose
goods that so not pollute when disposed. Municipalities are also interested in how to motivate earth-
friendly disposition. Marketers see profit opportunities in addressing disposition concerns.
Managing Money and Making Financial Decisions

How do consumers make financial decisions before, during, and after acquiring decisions? What
are their attitudes toward money and prices? These topics are the focus of much study because
consumers don’t always do a good job of managing money. For example, consumers generally know
how to budget and plan for ordinary purchases, but they tend to underestimate spending on out-of-the
–ordinary purchases and, in particular, spend more than anticipated on individual purchases. On the
other hand, consumers do adjust their budgets in some situations. For example, perhaps because the
price of gas is very salient (with prices displayed on store signs and discussed in the news), when gas
price rise, consumers do tend to shop less frequently, switch to one-stop shopping at low-price retail
establishments, and reduce overall spending to compensate.
Consumer behavior also affects decisions about managing debt. For instance, consumers are
likely to make higher repayment when credit card statements make no mention of a mandatory
minimum monthly repayment. Another study found that consumers who close a credit account are more
likely to be successful at eliminating their debt, because taking this step motivates them to persist in
pursuit of their goal. When consumers feel powerful and in control of their resources, they will put more
money in the bank in order to maintain that state power.
Consumer Behavior Is a Dynamic Process

The sequence of acquisition, consumption, and disposition can occur over time in dynamic
order-hours, days, weeks, months, or years. To illustrate, assume that a family has acquired and is
using a new car. Usage provides the family with information-whether the car drives well and is reliable-
that affects when, whether, how, and why members will dispose of the car by selling, trading, or junking
it. Because the family always needs transportation, disposition is likely to affect when, whether, how,
and why its members acquire another car in the future.
Entire markets are designed around linking one consumer’s disposition decision to other
consumer acquisition decisions. When consumers buy used cars, they are buying cars that others have
disposed of. From eBay’s online auction to Goodwill Industries’ second-hand clothing stores, from
consignment shops to used books sold online, many businesses exist to link one consumer’s
disposition behavior with another acquisition behavior. Environmental attitudes and auctions are
changing, which means marketers must take into account consumers’ goals and priorities, perceptions
of brans, and internal processes when planning marketing efforts.
Broader changes in consumer behavior occur over time, as well. Fifty years ago, consumers
had far fewer brand choices and were exposed to fewer marketing messages. In contrast, today’s
consumers (particularly millennia’s) are more connected, easily able to research offerings online,
access communications and promotions in multiple media, and check what others think of brans with a
quick search or social media post.
• Acquisition The process by which a consumer comes to own an offering

• Usage The process by which a consumer uses an offering.
• Disposition The process by which a consumer discards an offering
Consumer Behavior Can Involve Many People

Consumer behavior does not necessarily reflect the action of a single individual. A gloop of
friends, a few co-workers, or an entire family may plan a birthday party or decide where to have lunch,
exchanging ideas in person, on the phone, via social media, or by e-mail or text message. Moreover,
the individuals engaging in consumer behavior can take on one or more roles. In the case of a car
purchase, for example, one or more family members might take on the role of information gathered by
researching different models. Others might assume the role of influencer and try to affect the outcome
of a decision. One or more members may take on the role of purchaser by actually paying for the car,
and some or all may be users. Finally, several family members may be involved in the disposal of the
car.
Consumer Behavior Involves Many Decisions

Consumer behavior also involves understanding whether, why, when, where, how, how much,
how often, and for how long consumers will buy, use, or dispose of an offering.
Whether to Acquire/Use/dispose of an Offering

Consumer must decide whether to acquire, use, or dispose of an offering. They may need to
decide whether to spend or save their money when they earn extra cash. How much they decide to
spend may be influenced by their perceptions of how much they recall spending in the past.
They may need to decide whether to order a pizza, clean out a closet, or download a movie.
Come consumers collect items, for example, a practice that has created a huge market for buying,
selling, transporting, storing, and insuring collectible items. Decisions about whether to acquire, use, or
dispose of an offering are often related to personal goals, safety concerns, or a desire to reduce
economic, social, or psychological risk. However, such decisions can also be affected by subtle cues
in our environment. Did you know that the mere act of hand washing can affect people’s decisions to
relinquish their own possessions? Also, simply entering a lottery can undermine someone’s self-control-
making a person more likely, for example, to give in to indulgent purchases. Self-control is an important
factor in many consumer behavior situations, as you’ll see in later chapters.
What Offering to Acquire/Use/Dispose Of

Consumers make decisions every day about what to buy; in fact, U.S. consumers spend an
average of about 90 per day on goods and service in typical month. In some cases, we make choices
among product or service categories such as buying food versus downloading new music. In cases, we
choose between brands such as whether to buy an Apple iPhone or a Samsung Galaxy phone. Our
choices multiply daily as marketers introduce new products, sizes, and packages.
Why Acquire/Use/Dispose of an Offering

Consumption can occur for a number of reasons. Among the most important reasons, as you
will see later, are the ways in which as offering meets someone’s needs, values, or goals. Some
consumers acquire tattoos as a form of self-expression, to fit into a group, or to express their feelings
about someone or something. Taking the self-expression of tattoos into the automotive arena, 3M
makes a series of vinyl wrap “tattoos” for car owners to use in personalizing the look of their vehicles.
Acquisition may be related to a consumer’s attitude toward money, materialism, status, emotions, and
self-control.
Sometimes our reasons for using an offering as filled with conflict, which leads to some difficult
consumption decisions. Teenagers may smoke cigarettes or e-cigarettes, even though they know it is
harmful, because they think smoking will help them gain acceptance. Some consumers may be unable
to stop acquiring, using, or disposing of products. They may be physical addicted to products such as
cigarettes, or they may have a compulsion to eat, gamble, or buy.
Why an Offering Is Not Acquire/Used/Disposed Of

Marketers also try to understand why consumers do not acquire, use, or dispose of an offering.
For example, consumers may delay buying a particular consumer electronic product because they
believe that the product will soon be outdated or that some firms will leave this market, leaving them
without after-sale support or service. At times, consumers who want to acquire or consume an offering
are unable to do so because what they want is unavailable. Ethics and social responsibility can also
play a role. Some consumers may want to avoid products made in factories with questionable labor
practices or avoid movies downloaded, copied, and shared without permission. This is why
transparency is increasingly of concern when consumers want to know what a brand or company stand
for.
How to Acquire/Use/Dispose of an Offering

Marketers gain a lot of insight by understanding how consumers acquire, consume and dispose
of an offering.
Ways of Acquiring an Offering

How do consumers decide whether to acquire an offering in a store or all, online, or at an
auction? How do they decide whether to pay with cash, a check, a debit card, a credit card, an electronic
system such as PayPal, or a “mobile wallet” smartphone payment app such as Apple Pay? As the cost
of cars and car insurance rises, some consumers are choosing not to buy cars, but to instead use
services like Zip car or Uber.
Ways of Using an Offering

In addition to understanding how consumers acquire an offering, marketers want to know how
consumers use an offering. For obvious reasons, marketers want to ensure that their offering is used
correctly. Improper usage of offerings like cough medicine or alcohol can create health and safety
problems. Because consumers may ignore label warnings and directions on potentially dangerous
products, marketers who want to make warning more effective have to understand how consumers
process label information.
Using an offering can include what we use with the offering (e.g., chips with salsa) as well as
how we store and organize the items in our homes. Some interesting research suggests that we like to
have things organized in our homes because we fell less anxiety and a greater sense of control over
our lives when things are structured. Notably though what seems organized to one person may seem
messy to another. Whereas you might think about the items in your room in finely grained categories
(e.g., black shirts are different from white shirts, and pants, shoes and belts are in a different category
altogether), your roommate might have broader categories for thinking of items in their closet (they’re
all just “my clothes”). You may think her closet is messy; your roommate may think the organization of
her closet is perfectly fine.
Ways of Disposing of an Offering

Sometimes nothing but the packaging remains of an offering (such as food) after it has been
consumed. This leaves only a decision about whether to recycle or not, and how. Consumers who want
to dispose of a tangible product have several options:
• Find a new use for it. Using an old toothbrush to clean rust from tools or making shorts out of
an old pair of jeans shows how consumers can continue using an item instead of disposing of
it.
• Get rid of it temporarily. Renting or lending an item is one way of getting rid of it temporarily.
• Get rid of it permanently. Throwing away an item, sending it to recycling center, trading it,
giving it away, or selling it are all ways to get rid of it permanently. However, some consumers
refuse to throw away things that they regard as special, even if the items no longer serve a
functional purpose.
When to Acquire/Use/Dispose of an Offering

The timing of consumer behavior can depend on many factors, including our perceptions of and
attitudes toward time itself. Consumer may think in terms of whether it is “time for me” or “time for
others” and whether acquiring or using an offering is planned or spontaneous. In cold weather, our
tendency to rent movies, call for a tow truck, or shop for clothes are greatly enhanced. At the same
time, we are less likely to eat ice cream, shop for a car, or look for a new home during cold weather.
Time of day influences many consumption decisions, which is why Panera bread is adding drive-
through to accommodate breakfast customers in a hurry and McDonald’s now serves breakfast all day,
every day.
Our need for variety can affect when we acquire, use, or dispose of an offering. We may decide
not to eat a sandwich for lunch today if we have already had it every other day this week. Transitions
such as graduation, birth, retirement, and death also affect when we acquire, use, and dispose of
offerings. When we consume can be affected by traditions influence by our families, our culture, and
the area in which we live.
Decisions about when to acquire or use an offering are also affected by knowing when others
might not be buying or using it. Thus, we might choose to go to the gym when we know that others will
not be doing so. In addition, we may wait to buy until we know something will be on sales; even if we
have to line up to buy something popular, we are likely to continue waiting if we see many people joining
the line behind us. Also, waiting to consume a pleasurable product such as candy increases our
enjoyment of its consumption, even though we may be frustrated by having to wait.
Where to Acquire/Use/dispose of an Offering

In addition to acquisition decisions, consumers also make decisions about where to consume
various products. For example, the need for privacy motivates consumers to stay home when using
products that determine whether they are ovulating or pregnant. On the other hand, wireless
connections allow consumers in public placeless to make phone calls, post messages and photos to
social media sites, play computer games, and download photos or music from anywhere in the world.
Finally, consumers make decisions regarding where to dispose of goods. Should they toss an
old magazine in the trash or the recycling bin? Should they store an old photo album in the attic or give
it to a relative? Older consumers, in particular, may worry about what will happen to their special
possessions after their death and about how to divide heirlooms without creating family conflict. A
growing number of consumers are recycling unwanted goods through recycling agencies or non-profit
groups or giving them directly to other consumers through websites like The Freecycle Network
How Much, How Often, and How Long to Acquire/Use/Dispose of an Offering

Consumers must make decisions about how much of a good or service they need; how often
they need kit; and how much time they will spend in acquisition, usage, and disposition. In general,
consumers don’t like to waste things, and therefore will consider whether they are buying more of a
product than what they will use. Interestingly though, we can sometimes mis predict how happy we will
be from usage. Although we might want to binge-watch eight episodes of a favorite TV show we’ve
downloaded or streamed, research shows that longer breaks between episodes (e.g. watching one
episode a night) will actually make us enjoy the series more. Usage decisions can vary widely from
person to person and from culture to culture.
Sales of a product can be increased when the consumer (1) use larger amounts of the product,
(2) uses the product more frequently, or (3) uses it for longer periods of time. Bonus packages may
motivate consumers to buy more of a product, but does this stocking lead to higher consumption? In
the case of food products, consumers are more likely to increase consumption when the stock pole
item requires no preparation. Usage may also increase when consumers sign up for flat-fee pricing
covering unlimited consumption of telephone services or other offerings. However, because many
consumers who choose flat-fee programs overestimate their likely consumption, they often pay more
than if they had chosen per-usage pricing.
Eight Ways to Acquire an Offering

Buying Buying is a common acquisition method used for many offerings
Trading Consumers might receive a good or service as part of a trade
Renting or leasing Instead of buying, consumers rent or lease cars, furniture, vacation
homes, and more.
Bartering Consumers (and businesses) can exchange goods or services
without having money change hands.
Gifting Each society has many gift-giving occasions as well as informal
rules dictating how gifts are to be given, what an appropriate gift is,
and how to respond to a gift.
Finding Consumers sometimes find good that others have lost (hats left on
a bus) or thrown away
Stealing Because various offerings can be acquired through theft, marketers
have developed products to deter this acquisition method, such as
alarms to deter car theft.
Stealing Another method of acquisition is by sharing or borrowing. Some
types of “sharing” are illegal and border on theft, as when
consumers copy and share movies.
Consumer Behavior Involves Emotions and Coping

Consumer researchers have studied the powerful role that emotions play in consumer behavior.
Positive and negative emotions as well as specific emotions like loneliness, hope, fear, regret, guilt,
embarrassment, and general moods can affect how consumers think, the choices they make, how they
feel after making a decision, what they remember, and how much they enjoy an experience. Emotions
like love sometimes describe how we feel about certain brands, possessions, and experiences.
Consumers often use products to regulate their feelings-as when a scoop of ice cream seems like a
good antidote to a bad quiz score.
Because issues related to consumer behavior can involve stress, consumers often need to cope
in some way. Researchers have studied how consumers cope with difficult choices and an
overwhelming array of goods from which to choose, how consumers use goods and services to cope
with stressful events like having cancer; and how they cope with losing possessions due to divorce,
natural disasters, moving to a residential-care facility, and other significant events. They have even
studied the coping behavior of certain market segments, such as low-literacy consumers, who often
find it challenging to understand the marketplace without being able to read.
WHAT AFFECTS CONSUMER BEHAVIOR?

The many factors that affect acquisition, usage, and disposition decisions can be classified into four
broad domains:
• The psychological core
• The process of making decisions
• The consumer’s culture
• Consumer behavior outcomes.
Exhibit 1.1 A Model of consumer Behavior
The Psychological Core Consumer Behavior

•Motivation, Ability, and Outcomes and Issues
Opportunity •Innovations: Adoptation,
•From Exposure to Resistance and Diffusions
Comprehension •Symbolic Consumer Behavior
•Memory and Knowledge •Marketing, Ethics, and Social
•Attitude Formation and Responsibility in Today's
Change Consumer Society
The Process of Making The Consumer's Culture

Decisions •Social Influences
•Problem Recognition and •Consumer Diversity
Information Search •Household and Social Class
•Judgment and Decision- Influences
Making •Psychographic Values,
•Post-Decision Processes Personality, and Lifestyle
Although the four domains are presented in separate sections of this book, each domain is related to
all the others. For example, to make decisions that affect outcomes like buying new products, consumers must
first engage in processes describe in the psychological core. They need to be motivated, able, and have the
opportunity to be exposed to, perceive, and attend to information. They need to think about and comprehend
this information develop attitudes about is, and form memories they can retrieve during the decision process.
The culture environment also affects what motivates consumers, how they process information, and
the kinds of decisions they make. Age, gender, social class ethnicity, families, friend, and other factors affect
consumer values and lifestyles and, in turn, influence the decisions that consumers make and how and why
they make them.
The Psychological Core: Internal Consumer Processes

Before consumers can make decisions, they must have some source of knowledge or
information upon which to base their decisions. This source the psychological core:
o motivation, ability, and opportunity;
o exposure, attention, perception, and comprehension;
o memory and knowledge; and
o attitudes about an offering.
Motivation, Ability, and Opportunity

Consider the case of a consumer named Jason who is deciding on a ski vacation. In Jason’s
mind, the vacation decision is risky because it will consume a lot of money and time, and he does not
want to make a bad choice. Therefore, Jason is motivated to learn as much as he can about variously
vacation option, think about them, and imagine what they will be like. He has put other activities aside
to give himself the opportunity to learn and think about this vacation. Because Jason already knows
how to ski, he has the ability to determine what types of ski vacation he would find enjoyable. Whether
he focuses on concrete things (how much the trip will cost) or abstract things (how much fun he will
have) depends on how soon he plans to travel and how well the place he plans to visit fits with his self-
concept.
Exposure, Attention, Perception, and Comprehension

Because Jason is motivated to decide where to go on vacation and has both the ability and
opportunity to do so, he will make sure he is exposed to and attends to any information relevant to his
decision. He might look at travel ads and websites, read travel-related articles, check Twitter for special
deals, browse photos on Pinterest, and talk with friends and travel agents. Jason will probably not
attend to all vacation information; in fact, he is likely to be exposed to information he will never
consciously perceive or pay attention to. He must identify what he has perceive-is it an ad or something
else? –and then determine what country or mountain resort is involved, all as part of the comprehension
process. He might infer that Kitzbuhel, Austria, is a reasonably priced vacation destination because a
website shows information consistent with this interpretation, for example.
Memory and Knowledge

Whether Jason can store what he learns about ski resorts in his memory-and whether he can
recall that information later-depends, in part, on his something new about ski resorts, he will organize
that knowledge according to categories such as places to stay on a ski vacation.” Jason will also
associate each new piece of information with other concepts he knows, such as “expensive “ or eco-
friendly”. Note that Jason may store information in memory, but his choices will be based only on the
information that can be retrieved from memory- a key point for marketers seeking to create strong brand
images and develop memorable communications.
Forming and Changing Attitudes

Jason is likely to form attitudes toward the vacations he has categorized and comprehended.
He may have a favorable attitude toward Kitsbuhel because a website describes it as affordable,
educational and fun. However, his attitudes might change as he encounters new information. Attitudes
do not always predict behavior. For example, although many of us have a positive attitude toward
working out, our attitude and our good intentions do not always culminate in a trip to the gym. For this
reason, attitudes and choices are considered as separate topics. For this reason, attitude and choices
are considered as separate topics.
The Process of Making Decisions

As shown in Exhibit 1.1, the processes that are part of the psychological core are intimately tied
to the process of making decisions. This domain involves four stages:
o Problem recognition
o Information search
o Decision-making
o Post purchase evaluation.
Problem Recognition and the Search for Information

Problem recognition occurs when we realize that we have an unfulfilled need. Jason realized
that he needed a vacation, for example. His subsequent search for information gave him insight into
where he might go, how much the vacation might cost, and when he might travel. He also examined
his financial situation. Elements of the psychological core are invoked in problem recognition and
search because once Jason realizes that he needs a vacation and begins his information search, he is
exposed to information, attends to and perceives it, categorizes and comprehends sit, and forms
attitudes and memories.
Making Judgments and Decisions

Jason’s decision is characterized as a high-effort decision, meaning that he is willing to invest
a lot of time and to exert mental and emotional energy in making it. He identifies several criteria that
will be important in making his choices: The trip should be fun and exciting, safe, educational, and
affordable. Not all decisions involve a lot of effort. Jason also faces low-effort decisions such as what
brand of toothpaste to take on the trip.
Again, the psychological core is invoked in making decisions. With a high-effort decision, Jason
will be motivated to be exposed to lots of information, think about it deeply, analyze it critically, and form
attitudes about it. He may have lasting memories about this information because he has thought about
it so much. Consumers are not always aware of what they are thinking and how they are making their
choices, so Jason might not be able to explain what affected his choices (background music in a travel
agency might even be an influence). Yet the emotions he thinks he will experience from different options
(excitement, relaxation) may well influence his ultimate choice. With a low-effort decision, such as what
brand of toothpaste to buy, he would probably engage in less information search and process
information less deeply, resulting in less enduring attitudes and memories.
Making Post decision Evaluations

This step allows the consumer to judge, after the fact, whether the decision made was the
correct one and whether to purchase that offering again. When he returns from his vacation, Jason will
probably evaluate the outcome of his decisions. If his expectation were met and if the vacation was
everything, he thought it would be, he will feel satisfied. If the vacation exceeded his expectations, he
will be delighted. If it fell short of them, he will be dissatisfied. Once again, aspects of the psychological
core are invoked in making post decision evaluations. Jason may seek out information that validates
his experiences, he may update his attitudes, and he may selectively remember aspects of his trip that
were extremely positive or negative.
o Culture. The typical or expected behaviors, norms, and ideas that characterize a group of
people.
o Reference group. A group of people consumers compare themselves with for information
regarding behavior, attitudes or values.
The Consumer’s Culture: External Processes

Why did Jason decide to go on a skiing trip in the first place? In large part, our consumption
decisions and how we process information are affected by our culture. Culture refers to the typical or
expected behaviors, norms, and ideas that characterize a group of people. It can be a powerful
influence on all aspects of human behavior. Jason had certain feelings, perceptions, and attitudes
because of the unique combination of groups to which he belongs and the influence they have on his
values, personality, and lifestyle.
Reference Groups and Other social Influences

When Jason sees groups of other, he perceives as similar to himself, he regards the as
reference groups, people whose value he shares and whose opinions he respects. He might also want
to emulate the behavior of people whom he admires and to listen to the advice they offer though word
of mouth (in person, on Facebook, on Twitter, etc.) Athletes, musicians, or movie starts sometimes
serve as reference groups, influencing how we evaluate information and the choices we make.
Diversity Influences
Jason is a member of many regional, ethic, and religious groups that directly affect the decisions
he makes. For example, although his decision to ski at a place far from home is fairly typical for a North
America man launch on his career, a consumer from a developing nation or a single woman from a
different culture may not have made the same choice. Also, his age, gender, and educational
background may all affect hi impressions of what constituted a good vacation, accounting for his interest
in a European ski trip.
Household and Social Class Influences

Because Jason is a member of the upper middle class and lives with his parents, these
household and social class influences may affect his decision to go to a luxurious European ski resort
with friends rather than join his family at a rustic ski area near home.
Values, Personality, and Lifestyle

The choices Jason makes are based, in part, on his beliefs, his personality, and his activities,
interests, and opinion. Thus, he may be attracted to a European ski trip because he wants a vacation
that he thinks will be exciting and out of the ordinary. He also anticipates that this vacation will test his
ability to manage on his own and give himself a sense of accomplishment
Consumer Behavior Outcomes and Issues

As exhibit 1.1 shows, the psychological core, decision-making processes, and the consumer’s
culture affect consumer behavior outcomes through the symbolic use of products and the diffusion of
ideas, products, or services through a market. They also influence and are influenced by issue of ethics
and social responsibility.
Consumer Behavior Can Symbolize Who We Are

The groups we belong to and our sense of self can affect the symbols or external signs we use,
consciously or unconsciously, to express our actual or desire identity. For example, while skiing, Jason
may wear North Face parka and Bolle goggles to communicate his status as an experienced skier. He
might use his phone to snap a selfie and take-home souvenirs, such as postcards and-shirts, which
symbolize his vocation.
Consumer Behavior Can Diffuse Through a Market

After Jason makes his vacation decision, he may tell others about his prospective trip, which, in
turn, could influence their vacation decisions. In this way, the idea of going to Kitsbuhel on vacation
may diffuse, or spread, to others. Had Jason resisted to Kitzbuhel (perhaps because he thought it was
too expensive or too far away), he might have communicated information that would make others less
likely to vacation there. Thus, the diffusion of information can have both negative and positive effects
for marketers.
Consumer Behavior, Ethics, and Social Responsibility

Sometimes consumers face potentially conflicting priorities. They try to balance an immediate
against a long-term outcome, or try to balance their own interest against the interest of others, for
instance, a consumer who steals may acquire something right away, but the long-term outcome is
personally risky and also problematic to society. Many consumers are interested in whether products
have been produced in an ethical manner, with ethically sourced inputs. Similarly, marketing decisions
may involve conflicting priorities and sometimes lead to ethical questions, such as whether marketing
efforts promote obesity, whether advertising affects self-image, and whether marketing invades
consumers’ privacy.
On the other hand, both consumers and marketers can and do use marketing for constructive
purposes, balancing short and long-term horizons plus the interest of themselves and others. These
efforts by marketers and consumers may be relatively narrow-focusing on satisfying the needs of a
particular consumer segment-or much broader, such as protecting the environment or improving the
community. In the example of Jason choosing a ski vacation, he might decide to stay at an eco-friendly
resort that conserves water and uses energy from clean sources. Or he may decide to buy his gear
second-hand on eBay or from a retailer that is transparent about its environmental impact.
WHO BENEFITS FROM THE STUDY OF CONSUMER BEHAVIOR?

Why do people study consumer behavior? The reasons are as varied as the four different groups who
use consumer research:
• Marketing managers
• Ethicists and advocates
• Public policy makers and regulators
• Consumers.
Marketing Managers
The study of consumer behavior provides critical information to marketing managers for
developing marketing strategies and tactics. The American Marketing Association’s definition of
marketing shows why marketing managers need to learn about consumer behavior:
o Marketing is the activity, set of institutions, and processes for creating, communicating,
delivering, and exchanging offering that have value for customers, clients, partners, and society
at large.
As this definition makes clear, marketers need consumer behavior insights to understand what
consumers and clients value; only then can they develop, communicate, and deliver appropriate goods
and services.
Ethics and Advocacy Groups

Marketers’ action sometimes raises important ethical questions. Concerned consumers
sometimes form advocacy groups to create public awareness of inappropriate practices. They also
influence other consumer as well as the target companies through strategies such as media statements
and boycotts. For example, U.S. advocacy groups such as Consumer Watchdog worry about
companies tracking what consumers do online. They and other groups support an enforceable “do not
track” mechanism that would allow consumers to, opt out of online tracking system. The Federal Trade
commission and Federal Communications commission are weighing input from advertisers and
consumers about the privacy issues involved and possible regulatory action
Public Policy Makers and Regulators

Understanding consumer behavior is crucial for legislators, regulators, and government
agencies in developing policies and rules to protect consumers from unfair, unsafe, or inappropriate
marketing practices. In turn, marketers’ decisions are affected by these public policy actions. Consider
the regulatory limit on tobacco marketing that are designed to discourage underage consumers from
smoking and to inform consumers of smoking health hazards. The United States, Canada, and many
other nations already ban cigarettes advertising on television and radio. Canada also requires large
graphic warning labels on each pack. However, electronic cigarettes and vaping are not yet regulated
as heavily as traditional tobacco products, despite a steady increase in consumer usage and health
concerns about liquid nicotine poisoning.
Understanding how consumers comprehend and categorize information is important for

recognizing and guarding against misleading advertising. For instance, researchers want to know what
impressions an ad creates and whether these impressions are true. They also want to know how
marketing influences consumers’ decisions to comply with product usage instructions, such as using
medical treatments as prescribed. Consumer behavior research helps government officials understand
and try to improve consumer welfare. One example is the increase in childhood obesity over the past
few decades, which government officials and regulators are working to address and influence marketing
activities. Even in developing nations where hunger is an on-going issue, too many children are
overweight, a cause for concern around the world.
Academics
Understanding consumer behavior is important in the academic world for two reasons. First,
academic disseminate knowledge about consumer behaviors when they teach course on the subject.
Second, academics generate knowledge about consumer behavior when they conduct research
focusing on how consumers act, think, and feel when acquiring, using, and disposing of offering. In
turn, such academic research is useful to marketing managers advocacy groups, policy makers,
regulators, and others who need to understands consumer behavior.
Consumers and Society

Understanding consumer behavior enables marketers and other organizations to provide tools
for more informed decision-making. For example, research indicates that we better understand the
difference among brands when we can view a chart, matrix, or grid comparing brands and their
attributes. Thus, matrices such as those presented in the Consumer Reports magazine or on its website
are likely to help many consumers make better decisions.
Product, service, and communications developments to protect certain consumer segments

have also grown out of understanding how consumers behave. Many people want to protect children
against inappropriate advertising or guard themselves against invasion of privacy. Some companies
have waited until legislators, regulators, or advocacy groups forced them to make changes. Finally, a
better understanding of consumer behavior can pave the way for programs that benefit society.
MAKING BUSINESS DECISIONS BASED ON THE MARKETING IMPLICATIONS OF CONSUMER

As you learn about consumer behavior, you may wonder how business use different consumer behavior
insights. You will find numerous sections titled Marketing Implications that illustrate how marketers apply
consumer behavior concepts in the real world. In general, consumer research helps marketers to develop
product-specific plans, as well as broader strategies for market segmentation, targeting, and positioning, and
to make decisions about the components of the marketing mix.
Developing and Implementing Customer-Oriented Strategy

Marketing is designed to provide value to customers. Thus, marketers must conduct research
to understand the various groups of consumers within the marketplace so that they can develop a
strategy and specific offerings that will provide such value. Once they develop and implement a suitable
strategy, marketers need research to determine how well it is working and whether it is delivering the
expected results (such as increasing market share or improving profits).
How Is the Market Segmented?

What one consumer values in a product may not be the same as what another consumer values.
Consider the market for orange juice, which can be offered from concentrate, fresh squeezed, with
other juices, and in other combinations. For example, Minute Maid, owned by Coca-Cola, has increased
sales by adding “Pure Squeezed” orange juices to its product line. A Minute Maid executive explains
that “there’s a segment of consumers who have an affinity for the not-from concentrate (juice). Cleary
research helps marketers understand the different groups that make up a market and whether they can
make an offering to appeal to one or more of these groups.
How Profitable Is Each Segment?

Consumer research can help marketers identify consumers who have needs that are not being
met and can reveal the size and profitability of each segment. For example, Daimler has identified
entrusted a potentially profitable segment of affluent auto buyers interested in upscale compact
vehicles. It is introducing a series of Mercedes-Benz compact cars and SUV specifically for this
segment, fully equipped with accessories for consumer’s digital devices, all part of its effort to regain
the lead in the premium auto market by 2020.
What are the Characteristics of consumer in Each Segment?

After determining how the market is segment and whether it is potentially profitable, marketers
need to learn about the characteristics of consumers in each segment, such as their age, education,
and lifestyle. This information helps marketers project whether the segment is likely to grow or to shrink
over time, a factor that affects future marketing decisions. For examples, sales of fitness goods and
services-as well as fitness tracking devices-are increasing as baby boomers, Millennial, and Generation
X consumers strive to get and stay in shape.
Are Customers Satisfied with Existing Offerings?

Marketers often do considerable research to learn whether consumers are currently satisfied
with the company’s offerings and marketing. For example, Harley-Davidson executives regularly ride
with members of the Harley Owners Group to see first-hand what satisfies motorcycle buyers and what
else they are looking for. They invite customers to submit their own videos online illustrating individual
Harley-Davidson experiences, and ask social media users to comment on proposed ad campaigns.
This research helps the company come up with new product ideas and new ways to promote bikes to
current and potential customers.
Selecting the Target Market

Understanding consumer behavior helps marketers determine which consumer groups are
appropriate targets for marketing tactics and how heavy users of a product differ from light users.
Marketers also need to identify who is likely to be involves in acquisition, usage, and disposition
decisions. U.S. home builders like Toll Brothers, for example, are interested in the trend of
multigenerational families living in one home. They know that some, if not all, of the family members
will want a say in the home purchase, and therefore the homes must have features that will appeal to
all the relatives involved in the decision.
Developing Products
Developing goods and services that satisfy consumers’ wants and need is a critical marketing
activity. Marketers apply consumer research when making a number of decisions about products and
branding.
What Ideas do Consumers Have for New Products?

First, markets need to design an offering that matches what consumers in the target market
want. As noted earlier, sometimes customers collaborate with marketers or with each other on the
development of innovative new offerings. The jewelry firm Swarovski is one of many companies that
have used online competitions to tap the creativity of their customers in designing new products. The
entire inventory of Chicago-based online T-shirt company thread less comes from designs submitted
by consumers. After consumers vote (online or via social media), Treadles puts the highest-scoring
items into production-with a ready segment of buyers who have a taste for such individualistic designs.
What Attributes Can Be added to or changes in an Existing Offering?

Marketers often use research to determine when and how to modify or tailor a product to meet
the needs of new or existing groups of consumers. For example, the U.S. Postal Service (USPS) knows
that many engaged couples still send printed wedding invitations through the mail instead of
communicating electronically. To supplement its regularly updated series of stamps, the USP designed
a stamp specially for wedding invitations-which generated #375 million in sales within a few years Now
the USPS offers a range of wedding-stamp designs invites consumers to personalize their own wedding
stamps.
How should the Offering Be Branded?

Consumer research plays a vital role in decisions about choosing a brand and differentiating it
from competing brands and from other brands in the company’s product portfolio. For example, the
Japanese automaker Nissan once markets cars under the Datsun brand, but eliminated that brand in
favor of its corporate name: Nissan, in 1981. Later, the company introduced the Infiniti brand to
distinguish its luxury autos from its other cars. Now Nissan is brought back the Datsun brand for small,
low- priced cars to be sold in emerging market such as Russia, India, and Indonesia. This strategy
allows Nissan to maintain a separate brand image and positioning for each of these product lines.
What should the Package and Logo Look Like?

Many marketers use consumer’s research when making decisions about packaging and logos.
For example, if you were to buy a bag of pretzels, you might infer that a bag with 15 pretzels on the
package would contain more pretzels that one that shows only 3 pretzels on the package. ConAgra
Foods, which makes products such as Orville Redenbacher popcorn, takes online shopping habits into
consideration when designing product packages. By developing smaller packages that cost less to ship,
ConAgra increase the opportunities for selling to cost-conscious online shoppers.
Positioning
Another strategic choice is deciding how an offering should be positioned in consumers’ minds.
The desired image should reflect what the product is and how it differs from the competition. For
example, the window of the World theme park on Shenzhen, China, is positioned as a fun place for
Chinese consumers who want to see the world’s most famous sights without leaving the country.
How Are Competitive Offerings Positioned?

Marketers sometimes conduct research to see how consumers view other brands in comparison
with their own and then plot the results on a graph called a perceptual map. Brans in the same quadrant
of the map are perceived as offering similar benefits to consumers. The closer companies are to one
another on the map, the more similar are to be competitors. Marketers can use perceptual maps to
determine how their offerings can be positioned as distinct and different from competing offering, based
on appeals that are sustainable over time.
How Should Our Offerings Be Positioned?

Companies use consumer research to understand what image a new offering should have in
the eyes of consumers and what messages will effectively support this image. The positioning should
suggest that the product is superior in one or more attributes values by the target market. For example,
Procter & Gamble’s research found that many consumers were dissatisfied with traditional dry-cleaning
establishments, in part because of inconsistent quality and also due to environment concerns about
cleaning chemicals. Seeing this as an opportunity, P& G positioned its Tide Dry Cleaners chain as
clean, green, and friendly-using earth-friendly cleaning products, the power of the Tide brand, and
attentive customer service.
Should Our Offering Be Repositioned?

Consumer research can help marketers reposition existing products (i.e. change their image).
Consider how the Versus sports cable channel was repositioned. Originally introduced as Outdoor Life
Network in 1995, the U.S. cable channel was repositioned as Versus in 2006 to reflect its broader sports
coverage. Even with an audience of 70million households, Versus fell short of rival ESPN’s audience
of 100 million households. Knowing that consumers are far more familiar with the NBC brand and
coverage, thanks to the network’s broadcasting of the Olympics and other high-profile events, Versus
was repositioned as NBC Sports Network, broadcasting round-the-clock sporting events and related
content.
Making Promotion and Marketing Communications Decisions

Research can help companies make decisions about promotional/marketing communications
tools, including advertising, sales promotions (premiums, contest, sweepstakes, free samples,
coupons, and rebates), personal selling, and public relations. One area receiving attention is the use of
techniques to measure consumers’ physiological and neurological responses to marketing
communications and other stimuli. The rise of social media adds another twist to promotion and
communications decisions. Word of mouth- which spreads quickly through social media –that is not
marketer-controlled, seem more credible to consumers than messages directly controlled by marketers.
What are Our Communication Objective?

Consumer research can be very useful in determining advertising objectives. It may reveal, for
example, that few people have heard of a new brand, suggesting that the advertising objective should
be to enhance brand-name awareness, If research indicates that consumers have heard of the brand
but don’t know anything about it, the advertising objective should be to enhance brand knowledge. If
consumers know the brand name but don’t know the characteristics of the brans that make it desirable,
the advertising should aim to enhance knowledge and encourage positive attitudes about it. And if
consumers know neither the brans nor the product’s benefits, the advertising should educate the target
about both.
What Should Our Marketing Communications Look Like?

Research can help marketers determine what words and visual-and what balance of text and
images-would be most effective for ad and brand recognition and recall. A brand name is better
remembered when placed in an ad that as interesting unusual, and relevant visuals. If the visuals are
interesting but unrelated to the product, consumers may remember the visuals but forget the product’s
name.
Online advertising is also being researched. One finding, for instance, is that customizing e-mail
message for targeted customers is an effective way to boost visits to the brand’s website. Another study
showed that both emotion and physiological arousal are factors in whether an online ad goes viral.
Specifically, an ad is more likely to be spread virally when the content evokes a positive emotional
response (such as awe) or a negative emotional response (such as anger). As an example, Kleenex’s
“Unlikely Best Friends” commercial, which featured a man and a dog-both in wheelchairs-attracted tens
of millions of online views due to positive emotional response?
Where Should Advertising Be Placed?

When marketers select specific media vehicles in which to advertise, they find demographic,
lifestyle, and media usage data very useful. Research shows that more people split their time among
many different media and that many people use recording technology to avoid commercials. Knowing
this, marketers are choosing media with better targeting or more consumer exposure in mind. For
example, Ford has used video ads on Facebook’s log-out page to promote its sporty Mustang car,
taking advantage of the ability to target by location, gender, and age. A growing number of firms are
using sponsorship of cause-related event (such as the Avon Walk for Breast Cancer) that attract the
interest of consumers in the targeted segments.
When Should We Advertise?

Research may reveal seasonal variations in purchases due to weather-related needs, variations
in the amount of discretionary money consumers have (which changes, for instance, before and after
Christmas), holiday buying patterns, and the like. In the weeks leading up to Easter, for instance, the
chocolate company Cadbury airs TV commercials, places print ads, sponsors special events, and posts
Facebook promotions for its chocolate eggs. In Australia, it has targeted 18-to 30-year-old chocolate
lovers with extensive Facebook advertising for new chocolate egg products just before Easter, when
this segment is most likely to buy.
Has Our Advertising Been Effective?

Finally, advertisers can research an ad’s effectiveness at various points in the advertising
development process. Sometimes marketers or ad agencies conduct advertising copy testing or
pretesting, testing and ad’s effectiveness before it appears in public. If the objective is creating brand
awareness and the tested ad does not enhance awareness, the company may replace it with a new
ad. Effectiveness research can also take place after the ads have been place in the media, such as
conducting tracking studies to see whether ads have achieved particular objectives over time.
What About Sales Promotion Objectives and Tactics?

When developing sales promotions, marketers can use research to identify sales promotion
objectives and tactics. For example, when Snack Factory wanted to attract new customers to its Pretzel
Crisps snacks and increase sales, the firm posted a $1 coupon on Facebook for two weeks. This
promotion added 7,000 new Facebook fans and, more importantly, the rate of redemption of the
coupons was 87 percent. Without fanfare, Snack Factory switched to a buy one, get one free coupon
on Facebook. The new offer went viral, gaining Pretzel Crisps 15,000 fans in two weeks-plus an
impressive 95 percent coupon redemption rate. Now the brand has more than 325,000 “likes” and
regularly conducts sales promotions on Facebook, Twitter, Pinterest, and other social media sites.
Research can also prevent such pitfalls as offering coupons to certain consumers who won’t redeem
for fear of looking stingy.
Have Our Sales Promotions Been Effective?

Consumer research can answer this question. Marketers might compare sales before, during,
and after a promotion to determine changes in sales. Research can also indicate whether a free sample
has been more effective than a price promotion, whether a free gift enhances value perceptions and
purchase intentions, and how consumers react after a sales promotion has been discontinued.
How Can Salespeople Best Serve Customers?

Finally, research can help managers make decisions about salespeople. By tracking store
patronage at different times of the day or no different days of the week, retailers can determine the
appropriate number of store personnel needed to best serve customers at those times. Research also
offers insights into selecting salespeople and evaluating how well they serve customers. For example,
similarity between the consumer and a salesperson or service provider can influence whether
customers comply with these marketing representatives.
Making Pricing Decisions

The price of a product or service can have a critical influence on consumers’ acquisition, usage,
and disposition decisions. It is therefore very important for marketers to understand how consumers
react to price and to use this information in pricing decisions, a topic also covered in later chapter.
What Price Should Be charged?

Why do prices often end in 99? Consumer research has shown that people perceive $9.99 or
$99.99 to be cheaper than $10.00 or $100.00. Perhaps this is one reason why so many prices end in
the number 9. Too low a price can make consumers suspect the product’s quality. In general,
consumers respond better to a discount presented as a percentage off the regular price.
Also, when making a purchase, consumers consider how much they must pay in relation to the
price of other relevant brands or to the price they previously paid for that product, so marketers must
be aware of these reference prices. When buying multiple units of service for one bundle price (such
as a multiday ski pass), consumers may not feel a great loss if they use only some of the units because
they have difficulty assigns value to each unit. In addition, when consumers buy multiple products for
one bundle price (such as a case of wine), they are likely to increase their consumption because unit
costs seem low. How much consumers will pay can even be affected by the price of unrelated products
they happen to see first. Thus, the price you would be willing to pay for a T-shirt may vary, depending
on whether the prices you notice for shies in the store next door were high or low.
Also, studies indicate that consumers have differing perceptions of what a product is worth,
depending on whether they are buying or selling it. Generally, people tend to overestimate how much
others will pay for goods, particular when they are selling a product they own. Sellers should therefore
avoid this endowment effect; that is, they should not set a higher price than buyers are willing to pay.
How Sensitive Are Consumers to Price and Price changes?

Research also suggests that consumers have different views of the important of price. Some
consumers are very price sensitive, meaning that a small change in price will have a large effect on
consumers’ willingness to purchase the product. Other consumers are price insensitive and thus likely
to buy an offering regardless of its price. Marketers can use research to determine which consumers
are likely to be price sensitive and when. For fashion or prestige goods, a high price symbolizes status.
Thus, status-seeking consumers may be less sensitive to a product’s price and pay more than $50 for
t-shirt with a prestigious label.
When Should Certain Price Tactics Be Used?

Research also reveals when consumers are likely to be most responsive to various pricing
tactics. For example, consumers have traditionally been very responsive to price cuts on bed linens
during January. These “white sales” are effective because consumers have come to anticipate them at
the time of the year. Similarly, approximately five million U.S. consumers buy new TV specifically to
watch the Super bowl every year. Knowing this trend, online and store retailers mount price promotions
in the weeks leading up to the Super Bowl, aiming to get their share of these TV purchase.
Making Distribution Decisions

Another important marketing decision involves how products are distributes and sold to
consumers in retail stores. Here, too, marketers can use consumer research.
Where and When Are Target Consumers Likely to Shop?

Marketers who understand the value consumers place on time and convenience have
developed distribution channels that allow consumers to squire or use offerings whenever and wherever
it is most convenient for them. For example, 24-hour grocery stores, health clogs, catalogue ordering,
and online ordering systems give consumers flexibility in the timing of their acquisition, usage, and
disposition decisions. Some retailers, including Wal-Mart and Peapod, are testing virtual “stores”
actually lavage posters depict grocery shelves stocked with specific products, each featuring a QR
(quick response) code. Consumers use their smartphones to scan the QR codes items they want to
buy, complete the transaction, and schedule delivery for when they know they will be home.
What do Customers Want to See in Stores?

Retailers want to carry he assortment of merchandise best suited to consumers who shop in
their stores. Target, for instance, is experimenting with a new store concept that will help it determine
which “smart home” devices, which remotely control lighting and temperature, among other elements
of the home environment, are of interest to consumers. Assortment size itself can influence consumer.
How should Stores Be Designed?

Supermarkets are genially designed with similar or complementary items stocked near one
another because research shows that consumers think about items in terms of categories based on
products’ similar characteristics or use. Thus, stores stock peanut butter near jelly because the products
are often used together. Consumer research can also help marketers develop other aspects of their
retail environments.
Store design also depends on whether consumers are shopping for fun or seeking to quickly
accomplish a particular task like buying a certain item. During the back-to-school shopping season, for
instance, Target stores display form-room products together for consumer convenience. Knowing that
some consumers simply like to shop, retailers are increasingly creating more exciting and aesthetically
pleasing store environments.
Given the significant increase in shopping via computer and mobile devices, retailers must
design website for friendly functionality on devices used by target consumer groups. Research shows
that 38 percent of shoppers only use smartphone when buying from the Amazon retail website, for
example; similarly, 44 percent of shoppers only use smartphones when buying from the eBay site.
Stores and retail website must not only function well, they can convey a particular image and shopping
atmosphere. To illustrate, the apparel retailer Abercrombie & Fitch added an online playlist so
customers who shop via the Internet can click to her the same songs that play in its store.
DEVELOPING INFORMATION ABOUT CONSUMER BEHAVIOR

Consumer behavior research helps marketers determine what customers need, how they behave, what
they think, and how they feel. Based on research, markets make decisions about how to profitably satisfy
consumer needs.
Consumer Behavior Research Methods

Researchers collect and analyze two types of data for marketing purposes: primary and
secondary.
o Data collected for its own purpose is called primary data.
o When marketers gather data, tools such as: survey, focus groups, experiments, and the like to
support their own marketing decisions, they are collecting primary data.
o Data collected by an entity for one purpose and subsequently used by another entity for a different
purpose is called secondary data.
Survey
One of the most familiar research tools in the survey, a method of collecting information from a
sample of consumers, usually by asking questions, to draw quantitative conclusions about a target
population. Some questions may be open-ended, with the consumer filling in the blanks; other
questions may ask consumers to use a rating scale or check marks. Surveys can be conducted in
person, through the mail, over the phone, or by using the Web.
Focus Groups
Unlike a survey, which may collect input from hundreds of people responding individually to the
same questionnaire, a focus group brings together small groups of consumers to discuss an issue or
an offering. Led by a trained moderator, participants express their opinions about a given product or
topic, which can be particularly useful in identifying and testing new product ideas. Focus groups
provide qualitative insights into consumer attitudes as opposed to the quantitative (numerical) data
resulting from survey.
A related technique is the computer-based focus group, in which consumers go to a computer

lab where their individual comments are displayed anonymously on a large screen for viewing by the
group. This method can help researchers gather information on sensitive topics, as can focus groups
conducted by telephone or online rather that in person.
Focus group is a form of interview involving 8 to 12 people, a moderator leads the group and
asks participants to discuss a product, concept, or other marketing stimulus.
Interview
Like focus groups, interviews involve direct contact with consumers. Interview are often more
appropriate than focus groups when the topic is sensitive, embarrassing, confidential, or emotionally
charges. They provide more in-depth data than surveys when the researchers want to “pick consumers
brains”
In some interviews, researchers ask customers about the process they use to make a purchase
decision. One research company assigns professional interviewers to tape-record consumers thoughts
while shop for groceries. This research helps marketers understand how factors in the shopping
environment affect purchasing. Interviews can also uncover broader attitudes that affect behavior
across product categories. When the Underwriters Laboratories interviews hundreds of consumers in
United States, Germany, China, and India, it found a belief that high-tech firms were bring new products
to market more quickly than needed. The interviews revealed concerns about the fast pace of new
technology and about new products being introduced because companies wanted new products to sell,
not necessarily because the products were innovative.
Storytelling
Another tool for conducting consumer research is storytelling, in which consumers tell
researchers about their experiences with a product. At Patagonia, which markets outdoor clothing and
accessories, researchers collect consumer stories about backpacking and other outdoor experiences
for use in developing the company’s catalogues and online product descriptions. Storytelling not only
provides information relevant to the marketing of the product but also shows that Patagonia is in touch
with its customers and values what they say.
Although storytelling involves the real stories of real consumers, sometimes marketers ask
consumers to tell or write stories about hypothetical situations that the marketers has depicted in a
picture or scenario. The idea is that a consumer’s needs, feelings, and perceptions are revealed by the
way he or she interpret what is depicted in the picture of a woman at the entrance to a Zara store with
a thought bubble above her head and ask consumers to write what they imagine the woman is thinking.
Such stories can reveal what consumers think of a particular store, purchase situation, and so on.
Photography and Pictures

Some researchers use a technique in which they show pictures of experience that consumers
have had in order to help consumers remember and report experiences more completely. Researchers
may also ask consumers to draw or collect pictures that represent h\their thoughts and feelings about
the topic at hand. Still another practice is to ask consumers to photography their lifestyles. Researchers
then ask about the pictures and the meaning behind them or have the consumer write an essay, which
can help integrate the images and thoughts suggested by the pictures.
Diaries
Asking consumers to keep diaries can provide important insights into their behavior, including
product purchasing and media usage. Diaries often reveal how friends and family affect consumers’
decisions about money, cloths, music, fast foods, videos, concerts, and so on. For example, several
Federal reserve Banks around the country recruit consumers each year to maintain a diary of financial
transactions for several days. The purpose is to understand the use of cash, credit, debit, and electronic
payment methods and identify changes in payment preferences over time.
Experiments
Consumer’s researchers can conduct experiments to determine whether certain marketing
phenomena affect consumer behavior. For example, they might design an experiment to learn whether
consumers’ attitudes toward brands are affected by the brand name as opposed to factors such as
product features, package, color, logo, room temperature, or the consumer’s mood. With experiments,
researchers randomly assign consumers to receive different “treatment” and then observe the effects
of these treatments. To illustrate, consumers might be assigned to groups that are shown different
brand names. The researchers collect data about participant’s attitudes toward the name and compare
attitudes across groups. In a taste-test experiment, they might randomly assign consumers to groups
and then ask each group to taste a different product. Comparing evaluations of the product across the
groups will show which product is preferred.
An important aspect of such experiments is that the groups are designed to be identical in all
respects except the treatment, called the independent variable. Thus, in a taste-test experiment, only
the taste of the food or beverage is varied.
Field Experiments
Although experiments are often conducted in controlled laboratory situations, marketers can
plan and implement experiments in the real world, known as “field experiments”. One type of filed
experiments a market test, reveals whether an offering is likely to sell in a given market and which
marketing-mix elements most effectively enhance sales. Suppose marketers want to determine how
much advertising support to give to a new product. They could select two test markets of a similar size
and demographic composition and spend a different amount of money on advertising in each market.
By observing product sales in the two markets over a set period, the marketers would able to tell
whether the added investment in advertising had a significant sales impact.
Conjoint Analysis
Many marketers use the sophisticated research technique of conjoint analysis to determine
the relative importance and appeal of different levels of an offering’s attributes. To start, researchers
identify the attributes of the offerings, such as package size, specific product features, and price points.
Next, they determine the levels to be tested for each attribute (e.g., large or small size). Then they ask
consumers to react to a series of product concepts that combine these attributes in different ways.
Observations and Ethnographic Research

At times, researchers observe consumers to gain insight into potentially effective product,
promotion, price, and distribution decisions. Some companies conduct ethnographic research, in
which research interview and observe (and perhaps videotape) how consumers behave in real-world
surroundings.
Purchase Panels
Sometimes marketers try to understand consumer behavior by tracking what consumers buy
pm different purchase occasions. This kind of research simply records whether a behavior occurred.
Such behavioral data may be collected from special panel members, from a representative sample of
the general population, or from the marketer’s target market. Every time panel members go shopping,
the cash register records their purchase. By merging purchase data with demographic data, marketers
can tell who is purchasing a product, whether those consumers are also buying competitors pouts, and
whether a coupon or other sales promotion was involved.
Data Base Marketing and Big Data

The increasing availability of large-scale database filled with consumer information, coupled
with technological advances in computing power and advanced analytical models, has led to
considerable discussion about the use of “big data” and its potential to transform our understanding of
consumer behaviors. With big data, marketers combine data from various research sources into a
common database. For example, a database might contain on formation about targeted consumers’
demographics and lifestyles combined with data about their purchase in various product categories
over time, their media habits, and their usage pouf coupons and other promotional devices. Data in
these databases can be analyze by techniques that search for patterns in the data, which is called data
mining.
Netnography
Researchers can use a variety of methods for netnography, ethnographic research techniques
adapted for the observation and analysis of consumers’ online behaviors and comments. The content
consumers post on social media, brand forums, and website, as well as data on brand like and dislikes
and consumers’ experiences with offerings all provide rich materials for netnography research.
However, research are sstill learning to interpret the intentions, attitudes, and emotions inherent in
message and images on Twitter, Facebook, Instagram, Pinterest, and other social media.
Psychophysiological Reactions and Neuroscience

Most marketing research involves either collecting verbal responses from consumers (e.g.
answers to questions and self-reports about media and purchase behavior) or observing consumer
behavior (e’. g.’ under laboratory conditions, in real life, or online). But verbal reports can be greatly
affected by subtle variations in hoe questions are worded, what sequence they are asked in, and what
response scale or a 1–3-point agreement scale).
Neuroscience is the scientific study of the nervous system, which includes the brain, the spinal
cord, and the retina. Development in neuroscience has led to the introduction of new methodologies to
collect data on fundamental brain processes involved in consumer behavior.
Today, consumer researchers are gaining deeper insights by measuring physiological reactions
and applying neuroscience to understand how consumers respond to various stimuli.
TYPES OF CONSUMER RESEARCHER’S

1. In-House Marketing Research Departments
The benefits of conducting “in-house research (conducted by the company for the company)
are that the information collected can be kept within the company and that opportunities for information
to leak to competitors are minimized. However, internal departments are sometimes viewed as fewer
objectives than outside research firms since they may have a vested entrust in the research results.
For example, employees may be motivated to show that the company is making good decisions, a
situation that may unwittingly bias the nature of their research of the outcomes they report.
Consequently, some companies use outside research companies to gather their consumer research.
2. External Marketing Research

External research firms often help design a specific research project before it begins. They
develop measuring instruments to erasure consumer responses, collect data from consumers, analyze
the date, and develop reports for their clients. Research firms specializing in neuroscience have help
Procter & Gamble, Campbell soup, turner Broadcasting, and others fine-tune their marketing message
and plan new offerings.
3. Advertising Agencies and Media Planning Firms

Full-service advertising agencies and media planning firms conduct research to better
understand what advertising messages and media will appeal to their client’s target markets. For
example, the international home-furnishing chain IKEA asked MEC global and Ogilvy & Mather to
develop a campaign to increase the amount its customer spend during each transaction. When agency
researchers studied the buying and consumption behavior of 35-year-old IKEA customers, they found
that these shoppers associated the retailer with accessory merchandise, rather then with major furniture
piece and sets. The researchers also discovered that IKEA shoppers were looking for creative ideas
they could adapt to personalize their living spaces. Based on this research, the agencies developed a
multimedia campaign showing how the store offers choices for furnishing entire rooms with personal
flair. The campaign included a brand community where consumers could upload photos of rooms the
furnished and decorated with IKEA products, as inspiration for other consumers. The result: IKEA’s
sales of living room set rose 9 percent.
Some advertising agencies have departments to test advertising concepts as part of the service
they provide to clients. Agencies may also conduct advertising pretesting’s, suing drawing of ads or
finished ads, to make sure that an ad is fulfilling its objectives before it is place in the media. Tracking
studies can determine whether the percentage of target market consumers who are aware pf a brand
has changes as a function of the amount, duration, and timing of its advertising.
4. Syndicated Data Services

Syndicate date service are companies that collect and then sell the information they collect,
usually to firms that market products and services to consumers. For example, the Yankelovich Monitor
study collects data on consumer lifestyle and social trends using 90-minute interviews at the homes of
approximately 2,500 adults. Its annual reports describing current and projected lifestyle trends help
advertising agencies and company marketers develop content for promotional messages, choose
media, identify new product ideas plan positioning strategy, and make other marketing decisions.
Nielsen is syndicated data service that tracts the TV viewing habits of thousands of particular
U.S. households. Using digital set-top equipment, it records which TV shows each household member
is viewing and when.
By combining demographic and TV viewing behavior –including viewing on personal computers,

tablet computers, and cell phones, not just on home TV sets- Nielsen can describe the audience for
individual shows. Networks, cable stations, and independent channels use this information to determine
whether TV shows should be renewed and how much they can charge for advertising time on a
particular show. In general, advertiser will pay more to advertise on very popular shows (those with
higher Nielsen ratings). Advertisers who buy Nielsen data can assess which TV shows they should
advertise in, basing their decisions on how well the audience’s demographic characteristics match the
sponsor’s target market. Nielsen also conducts research into consumers’ use of the Internet, video
games, mobile devices, and, other media that carry ad messages.
5. Retailers
Large retail chains often conduct consumer research. By using electronic scanners to rack sales
of a brand or product category, they can determine which are their best and worst-selling items and see
how consumers respond to coupons, discounts, and other promotions. Because salespeople often
interact directly with customers, retailers sometimes use research to measure customer satisfaction
and determine how they can improve service quality. Often retailers use research to uncover new needs
and understand brand perceptions. Raymond, a clothing chain based in India, conducted research to
investigate consumers’ preferences and brand attitudes within the United Arab Emirates and Saudi
Arabia. After ascertaining that Gulf-region consumers accepted its brand and felt an emotional
connection with it, Raymond designed stores specifically for these markets. Now the chain anticipates
ongoing expansion in Dubai and other Gulf markets.
6. Research Foundations and Trade Groups

Many researchers’ foundations and trade groups collect consumer research. A research
foundation is a non-profit organization that sponsors research on topics relevant to the foundation’s
goals. As an example, the non-profit Advertising Research Foundation seeks to improve the practice
of advertising, marketing, and media research. It sponsors conferences and webinars, and publishes
reports related to research in these areas. The Marketing Science Institute is another non-profit
organization that sponsors academic research to uncover information useful to marketers.
Specialized trade groups may also collect consumer research to better understand the needs
of consumers in their own industries. A trade group is an organization formed by people who work in
the same industry, such as the Recording Industry Association of America, a group whose members
are involves in the music industry through recording, distribution, or retailing activities. This organization
has sponsored a host of research projects, including studies to understand how America musical tastes
and music consumption patterns have change over the years.
7. Government
Although government agencies do not use research to help market an offering, business
frequently use government research for marketing purpose, as when they examine census data to
estimate the size of various demographics markets. U.S. government studies by agencies such as the
Consumer Product Safety Commission, the Department of Transportation, and the Food and Drug
Administration are specifically designed for consumer protection. As an example, the Federal Trade
Commission (FTC) conducts research on potentially deceptive, misleading, or fraudulent advertising.
One issue the FTC continues to study for example is how consumers perceive goods and services
advertising using phases that suggest environmentally friendly properties. After conducting research,
the FTC issued and later clarified guidelines for how marketers are permitted to use specific phrases
(e, g, “renewable materials’) to avoid misleading consumers about “green” claims. Research can also
help resolve court cases involving marketing issues such as whether consumers are confusing a new
products trademark with an established products trademark, a situation that could hurt the establishes
brand.
8. Consumer Organizations
Independent consumer organizations also conduct research, generally for the purpose of
protecting or informing consumers. Consumers Union is an independent, non-profit testing and
information organization designed to serve consumers. The organization publishes the well-known
consumer Reports magazine. Many of the products described in consumer Reports are tested in
Consumers Union’s independent product-testing lab, and the results are posted on the organization’s
website.
9. Academics and Academic Research Centers

Although academic research involving consumers can be used for marketing and may have
implications for public policy, studies often are designed simply to enhance our general understanding
of consumer behavior. Much of the research reported in this book describes state-of-the-art academic
studies. Some academic research centers focus on a specific aspect of consumer behavior. For
example, the Restaurant of the Future, on the campus of Wageningen University in the Netherlands, is
designed to allow researchers to experiment with lighting, plates, food arrangement, seasoning and
ingredients, and other details. The goal is too see their effects on what and how much students and
faculty eat.
ETHICAL ISSUES IN CONSUMER RESEARCH

Although marketers rely heavily on consumer research in the development of successful goods
and services, the conduct of this research raises important ethical issues. As the following sections
show, consumer research has both positive and negative aspects.
The Positive Aspects of Consumers Research

Both consumers and marketers can benefit from consumer research. Consumer’s generally
have better acquisition, usage, and disposition experiences. Meanwhile, marketers can learn to build
stronger customer relationship by paying attention to consumer research. As a consequence, fewer
new products may fail, and more products of interest to consumers will be brought to market, making
for a more efficient and effective marketplace.
o Better Consumer Experience

Because consumer research helps marketers become more customer focused, consumers can
have better designed products, better customer service, clearer usage instructions, more information
that helps them make good decisions, and more satisfying acquisition and post purchase experience.
Consumer research (by government and consumer organization) also plays a role in protecting
consumers from unscrupulous marketers.
o Potential for Building customer Relationships
Research can help marketers identify ways of establishing and enhancing relationships with
customers through a better understanding of their needs, attitudes, and behavior. One example is
growing public interest in a marketer’s reputation for social responsibility, which in turn affects consumer
attitudes and action. Research shows that consumers wi;; evaluate a product more positively when they
know te company is actively engaged in social responsibility programs such as philanthropy. In fact,
consumers say they will pay more for offerings from business that demonstrate a strong commitment
to making a positive social and environment impact. Being aware of these kinds of broad trends in
consumer sentiments is a good foundation from which to approach relationship building.
The Negative Aspects 0f Consumers Research

Consumer research is a very complex process with a number of potentially negative aspect.
These include the difficulty of conducting research in foreign countries, the high costs of conducting
research, concerns about invasion of privacy, and the use of deceptive practices.
o Studying Consumer Behavior in Different Countries

Marketers who want to research consumer behavior in other countries face special challenges.
For instance, focus groups are not appropriate in all countries or situations. U.S. marketers often put
husband and wives together in a focus group to explore attitudes toward products like furniture. Hover,
this approach won’t work in countries like Saud Arabia, where women are unlikely to speak freely and
are highly unlikely to disagree with their husbands in which such setting. Focus groups must also be
conducted against a person’s disagreeing with the view of a group. Although telephone interviewing is
common in the United States, it is far less prevalent in developing nations. Marketers must also consider
a country’s literacy rate when planning survey research. At minimum researchers should word
questions carefully and check to ensure that the meaning is being accurately conveyed by first
translating questions into the other language and then translating them back into the original language.
o Potentially Higher Marketing Costs
Some consumers worry that the process of researching consumer behavior leads to higher
marketing costs, which in turn translate into higher product prices. Some marketers however, argue
that they can market to their customers more efficiently if they know more about them. For example,
product development, advertising, sales promotion costs, and distribution costs will be lower if
marketers know exactly what consumers want and how to reach them.
o Invasion of Consumer Privacy
A potentially more serious and widespread concern is that in the process of conducting and
using research-especially database marketing-marketers may invade consumers’ privacy. Consumers
worry that marketers know too much about them and that personal data, financial data, and behavioral
data may sell to other companies or used inappropriately without their knowledge or consent. For
example, after U.S. shopping canters followed shoppers’ cellphone signals to track consumers’
movements (anonymously) from store to store, legislators objected on privacy ground. Now malls and
retailers planning to use such system are using incentives such as price promotions to encourage
consumers to “opt in” for tracking via their smartphone. The loss of privacy due to improves facial
recognition software is another concern as companies and social media sites collect and analyze
personal images and videos. Privacy requirements vary from country to country. In some areas,
researchers must obtain consumers’ permission before collecting and storing person data.
o Deceptive Research Practices
Finally, unscrupulous researchers may engage in deceptive practices. One such practice is lying
about the sponsor of the research (e.g., saying it is being conducted by a non-profit organization when
it is really conducted by a for-profit company). Another deceptive practice is promising that respondents’
answers will remain anonymous when in fact tea company adds identifying information to the data in
order to be able to market to these consumes later on. Unscrupulous researchers may also promise.
EXPLAIN: DISCUSSING CONCEPTS Deep
INSTRUCTIONS: Answer the following questions below.

1. How is consumer behavior defined?
___________________________________________________________________________________
___________________________________________________________________________________
___________________________________________________________________________________
2. What are some of the factors in the psychological core that affect consumer decisions and behavior?
___________________________________________________________________________________
___________________________________________________________________________________
___________________________________________________________________________________
3. What is an offering?
___________________________________________________________________________________
___________________________________________________________________________________
___________________________________________________________________________________
4. What aspects of the consumer’s culture influence decisions and behavior?

___________________________________________________________________________________
___________________________________________________________________________________
___________________________________________________________________________________
5. How is marketing defined?

___________________________________________________________________________________
___________________________________________________________________________________
___________________________________________________________________________________
6. How can public policy decision makers, advocacy groups, and marketing managers use consumers
research?
___________________________________________________________________________________
___________________________________________________________________________________
___________________________________________________________________________________
TOPIC SUMMARY
In this lesson, you learned that:

• Consumer behavior understanding the set of decisions that an individual or group of consumers makes
over time about the acquisition, use, or disposition of goods, services, ideas, or other offering.
• The psychological core exerts considerable influence on consumer behavior.
• A consumer’s motivation, ability, and opportunity affect to, what he or she pays attention to, and what
he or she perceive and comprehends.
• Each aspect of the psychological core has a bearing on the consumer decision-making process, which
involves (1) problem recognition, (2) information search, (3) judgments and decision-making, and (4)
evaluating satisfaction with the decision.
• Consumer behavior is affected by the consumer’s culture and by the typical or expected behaviors,
norms, and ideas of a particular group.
• Consumers belong to a number of groups, share their cultural values and beliefs, and use their symbols
to communicate group membership.
• Household and social class influences are involved in consumer behavior, as are each individual’s
values, personality and lifestyles. Consumer behavior can be symbolic and express an individual’s
identity. It is also indicative of how quickly an offering spread throughout a market.
• Marketers study consumer behavior to gain insights that will lead to more effective marketing strategies
and tactics.
• Ethicists and advocacy groups are keenly interested in consumer behavior, as are public policy maker
and regulators who want to protect consumers from unsafe or inappropriate offering.
• Finally, studying consumer behavior helps marketers understand how to segments markets and how
to decide which to target, how to position an offering, and which marketing-mix tactics will be most
effective.
• Consumer research is a valuable tool that helps marketers design better marketing programs, aids in
the development of laws and public policy decisions regarding product safety, and promotes our general
understanding of how consumers behave and why.
• Tools may involve data collection from relatively few individual or from many individual and may study
consumers at a single point in time or track their behavior across time
• Some companies have internal marketing research departments to collect data; others use external
research firms to conduct studies. Advertising agencies and syndicates data services are two types of
outside agencies that conduct consumer research.
• Research supports a consumers-oriented view of marketing and can help companies improve
consumption experiences and strengthen customer relationships
REFERENCES
• Hoyer, Wayne D. . et.al., consumer Behavior 7th edition. Cengage Learning Asia Pte Ltd., 2018.
• Retrieved from:/https://bbamantra.com/project/consumer-behaviour-solved-case-Retrieve on August
1, 2021.study/https://bbamantra.com/project/consumer-behaviour- study/https://bbamantra.com

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1 Module 1 – Introduction to Consumer Behavior

2 Module 1 – Introduction to Consumer Behavior

ELEC 3 – Consumer Behavior

COURSE OUTCOMES (CMO)

In this course, you should be able to:

This module is divided into two lessons, namely:

MODULE LEARNING OUTCOMES

In this module, you should be able to:

SPECIFIC LEARNING OUTCOMES

1. A common acquisition method used for many offerings.

Factors Affecting Beneficiaries of Making Business

ENGAGE: CASE ANALYSIS

Factors Affecting Consumer Behavior

Activity 1: Base on the readings above, answers the following questions:

2. What other factors, if any, could been considered? Elaborate in detail.

EXPLORE: READING CONCEPTS

Consumer Behavior Involves More Than Buying

Managing Money and Making Financial Decisions

Consumer Behavior Is a Dynamic Process

• Acquisition The process by which a consumer comes to own an offering

Consumer Behavior Can Involve Many People

Consumer Behavior Involves Many Decisions

Whether to Acquire/Use/dispose of an Offering

What Offering to Acquire/Use/Dispose Of

Why Acquire/Use/Dispose of an Offering

Why an Offering Is Not Acquire/Used/Disposed Of

How to Acquire/Use/Dispose of an Offering

Ways of Acquiring an Offering

Ways of Using an Offering

Ways of Disposing of an Offering

When to Acquire/Use/Dispose of an Offering

Where to Acquire/Use/dispose of an Offering

How Much, How Often, and How Long to Acquire/Use/Dispose of an Offering

Eight Ways to Acquire an Offering

Consumer Behavior Involves Emotions and Coping

WHAT AFFECTS CONSUMER BEHAVIOR?

Exhibit 1.1 A Model of consumer Behavior

The Psychological Core Consumer Behavior

The Process of Making The Consumer's Culture

The Psychological Core: Internal Consumer Processes

Motivation, Ability, and Opportunity

Exposure, Attention, Perception, and Comprehension

Memory and Knowledge

Forming and Changing Attitudes

The Process of Making Decisions

Problem Recognition and the Search for Information

Making Judgments and Decisions

Making Post decision Evaluations

The Consumer’s Culture: External Processes

Reference Groups and Other social Influences

Household and Social Class Influences

Values, Personality, and Lifestyle

Consumer Behavior Outcomes and Issues

Consumer Behavior Can Symbolize Who We Are

Consumer Behavior Can Diffuse Through a Market

Consumer Behavior, Ethics, and Social Responsibility

WHO BENEFITS FROM THE STUDY OF CONSUMER BEHAVIOR?

Ethics and Advocacy Groups

Public Policy Makers and Regulators

Understanding how consumers comprehend and categorize information is important for

Consumers and Society

Product, service, and communications developments to protect certain consumer segments

MAKING BUSINESS DECISIONS BASED ON THE MARKETING IMPLICATIONS OF CONSUMER